The tools used to boot Linux are changing. Specifically, the Grand Unified Bootloader is now officially in maintenance mode only, and GRUB's developers have abandoned the original GRUB in favor of an entirely rewritten package, known as GRUB 2. Discover GRUB 2's new capabilities and how to use it.

Why do all Linux developers have a hard-on for spreading config options into dozens of different files, in multiple sub-directories? What is wrong with a single, simple config file?

Simple answer: automation. Most Linux systems these days focus on automation and scripting with GUI frontends. Separate files are much easier to deal with in automation and scripting tasks at least if done well.
That being said, there's a place for this and I don't believe the entire grub configuration is the best place for it. I could see splitting out each section, i.e. default config parameters and then each os entry being separate files, but the way they do it now is just overkill especially when it flies apart as it too often does.